Kuwait Projects Company Holding (K.S.C.P.) · KSE:KPROJ
Kuwait Projects Company Holding (K.S.C.P.) — Kuwait Projects Company Holding (KIPCO) — Investor Presentation (February 2013)
65 slides from Kuwait Projects Company Holding (K.S.C.P.)'s investor presentation, February 2013
Slide 1: At Tipping Point
At Tipping Point E Investor Presentation February, 2013 1
Slide 2: Disclaimer
Disclaimer This presentation is not an offer or invitation to subscribe to or purchase any securities. No warranty is given as to the accuracy or completeness of the information in this presentation. You must make your own independent investigation and appraisal of the business and financial conditi
Slide 3: Index
Index Executive Summary Bloomberg Ticker: KPROJ KK Reuters Ticker: KPRO.KW 3
Slide 4: A diversified company with deep regional expertise and roots
A diversified company with deep regional expertise and roots We are Operating holding company with an AuM of US$25 bn# Geography Middle East and North Africa Sectors Primarily financial services and media Track record 20 years of continuous profitability, 10 years of continuous dividends Valuation*
Slide 5: Our presence by geographies & sectors
Our presence by geographies & sectors Major Sectors Geography Asset Commercial management Revenues1 Media Insurance Real Estate Industrial Others banking & investment (2011) banking Kuwait ● ● ● ● ● ● ● 50% UAE ● ● ● 4% Bahrain ● ● ● ● 7% KSA ● ● ● 4% Jordan ● ● ● ● ● 16% Algeria ● ● ● ● 5% Tunisia
Slide 6: Track record of generating attractive returns
Track record of generating attractive returns Total Shareholders’ Return (Share Price Return and Dividend Yield) Growth Last 15 years (since rights issue) Last 10 years 206 199 97 90 50 109 109 30 1996 2011 2001 2011 Adjusted Share Price (US cents) Cumulative Dividend (US cents) Note: Data adjusted
Slide 7: Net asset value
Net asset value Attractive valuation for investors NAV Computation (US$ per Share) 0.1 0.1 0.0 708 405 440 0.1 fils fils fils 0.2 0.1 0.1 (0.6) 0.3 0.8 75% 0.7 19% 0.5 1.7 1.4 1.6 0.9 Burgan OSN United Gulf Gulf United Real United Net other Net Debt NAV KIPCO BVPS (US$) Bank Bank Insurance Estate In
Slide 8: Key highlights of 2012
Key highlights of 2012 1. Existing businesses performing strongly Commercial banking- Loan growth of 27% (excluding inorganics) Pay TV- Subscriber and revenue growth of 30% Insurance – Net premiums growth of 10% AMIB – Recurring revenue growth of 17% 2. Acquired growth businesses at attracti
Slide 9: Index: Strategy
Index Strategy 9
Slide 10: Strategic roadmap
Strategic roadmap Building Businesses Regional Thought Outlook leadership Investing Strong in engines managerial Being first Diversified MENA of growth revenue expertise in the streams region Target Team Approach ROE: 20% Balanced Portfolio Investment in companies with sustainable and predictable ca
Slide 11: Controlling or majority stakes
Controlling or majority stakes Business Commercial Asset Management & Media Insurance Real Estate Segments Banking Investment Banking (AMIB) Main Entities KIPCO Effective 60.2% 60.4% 96.0% 82.4%3 44.8% 62.9% Stakes1 Board 6 of 9 2 of 75 6 of 6 6 of 6 4 of 104 4 of 7 Representation Market Cap 2,962 U
Slide 12: Active management
Active management Key businesses – progress indicators Active Management – KIPCO Support & Action Business Then Now 1995 Net 2012 Net Transformed from a local player to regional player Interest Interest Margin Margin Hired new management in 2010/11 to execute on regional strategy 1.3% 2.6% Foc
Slide 13: Index: Performance Update
Index Performance Update 13
Slide 14: Strong operating performance of core companies
Strong operating performance of core companies Net profit up 10%, driven by 14% growth in net interest income Strong capital adequacy ratio of 18.5% and comfortable liquidity levels Provision coverage (aggregate of collateral) increased to 117% ( PY 108%) 33% growth in revenues; 30% growth i
Slide 15: Burgan Bank
Burgan Bank Loan Growth Deposit Growth Asset Quality US$ billion % NPA coverage (aggregate of collateral) US$ billion 30% 15% 54% 50% 22% 2% 56% 59% 39% 90% 111% 108% 117% 27% 12.0 21% Ex BBT 13.8 57% 58% Ex BBT 72% 49% 8.0 9.9 7.3 7.9 5.6 6.5 9.5% 10.5% 2.0 1.8 7.3% 7.0% 1.7 0.8 2.1 2.1 1.0 0.8 1.8
Slide 16: Burgan Bank: Regional operations
Burgan Bank: Regional operations Total Assets Operating Profit Net Profit US$ billion US$ million US$ million 228 195 6.3 80 72 5.3 109 114 44 3.4 81 3.2 2.5 30 28 51 24 1.4 39 1.0 22 21 9 9 9 9 13 12 0.9 0.7 0.5 0.6 (1) AGB JKB BoB TIB Total BBT^ AGB JKB BoB TIB Total BBT^ AGB JKB BoB TIB Total BBT
Slide 17: Burgan Bank: NPA- cyclical & not structural
Burgan Bank: NPA- cyclical & not structural NPA Trend As at end of 2012, the NPA (US$ million) combined coverage of non NPA Ratio (Percentage) performing assets (NPA) is 1,116 850 1,287 1,193 256 117% 208 193 173 171 121 122 90 110 NPA Ratio declined from 11.0% 11.8% 9.5% 10.5% 6.3% 6.0% 6.1% 7.
Slide 18: OSN
OSN MENA1 TV Overview Million MENA Region Latin America UK India US 418 577 63 1,223 314 Population 63 NA 26 225 132 Households 54 120 25 135 116 TV Households 2 37 14 112 102 Pay TV 85% NA 94% 60% 88% TV HHs /HHs (%) 3% 30% 54% 83% 88% Pay TV/ TV HHs (%) Market Capitalization of #1 N/A 32.9 20.2 1.
Slide 19: OSN (Cont'd)
OSN (Cont’d) Subscribers Net Adds Thousand Thousand 702 734 672 37 601 33 33 30 Q1'12 Q2'12* Q3'12 Q4'12^ Q1'12 Q2'12 Q3'12 Q4'12^ Churn Subscribers by country (December’ 2012) Others 17% 12% 17% 17% KSA 16% 24% Qatar 14% Egypt 9% UAE Bahrain 29% Q1'12 Q2'12 Q3'12 Q4'12^ 3% Kuwait 9% Quarterly Reven
Slide 20: United Gulf Bank
United Gulf Bank Revenue Investment Income US$ million US$ million 163 109 94 125 109 93 54 29 2009 2010 2011 2012 2009 2010 2011 2012 Net Profit & Provisions AUM & Capitalisation US$ million US$ billion 68 14.5% 19.5% 18.2% 23.2% 8.0 7.5 8.0 29 7.2 39 26 25 18 39 13 24 20 11 1 2009 2010 2011 2012 2
Slide 21: Gulf Insurance Company
Gulf Insurance Company Gross & Net Premium Written Net Underwriting Income US$ million US$ million 517 35 476 30 31 426 346 18 239 262 186 211 2009 2010 2011 2012 2009 2010 2011 2012 Net Premium Written Gross Premium Written Combined Ratio Net Profit US$ million 95% 89% 89% 92% 7.6% 10.9% 10.7% 12.7
Slide 22: United Real Estate Company (URC)
United Real Estate Company (URC) Total Revenue Operating Profit US$ million US$ million 197 114 124 100 70 85 48 35 2009 2010 2011 2012 2009 2010 2011 2012 Net Profit Total Assets & Return on Equity US$ million US$ million 80 5.4% 2.9% 5.1% 10.7% 1,855 1,959 1,294 36 1,162 20 13 2009 2010 2011 2012
Slide 23: URC: Balance Sheet (Break-up)
URC: Balance Sheet (Break-up) Total Assets Investment Properties Total Assets US$ 1,959 million 1 Total : US$ 864 million 2% 3% KIPCO Tower - Kuwait 3% Investment properties 2%2% 5% 3% Marina World - Kuwait Land for development 6% Salalah Mall - Oman Projects under 5% Shaheed Tower - Kuwait construc
Slide 24: KIPCO Consolidated: Financial performance
KIPCO Consolidated: Financial performance Revenues Net Income Consolidated Assets US$ million US$ million US$ billion 1,434 1,466 1,575 25.6 1,261 162 21.0 20.3 19.1 132 111 108 2009 2010 2011 2012 2009 2010 2011 2012 2009 2010 2011 2012 Proposed dividends of 20 fils (7 cents) & 5% stock dividend fo
Slide 25: KIPCO Parent debt profile: As at 31 Dec 2012
KIPCO Parent debt profile: As at 31 Dec 2012* Debt Type Debt Maturity Total Debt: US$ 1.4 billion Total Debt: US$ 1.4 billion 0-2 years, Term Loan 0.0% 10% Bonds > 4 years, 20% 45.0% MTN 2-4 years, 70% 55.0% Enhanced Debt Maturity Profile Liquidity KIPCO has cash & bank balance of US$635 mn 5.1 yrs
Slide 26: Index: Conclusion
Index Conclusion 26
Slide 27: Why KIPCO?
Why KIPCO? Experienced Compelling management strategy team Outstanding Pan MENA Supportive Player primary track record shareholder Strong Transparent liquidity Well positioned to deliver 20% return in medium term 27
Slide 28: Thank You
Thank You
Slide 29: Annexure: Portfolio Companies
Index Annexure 1 : Portfolio Companies 29
Slide 30: Burgan Bank (BB): Overview
Burgan Bank (BB): Overview Overview > Kuwait based commercial bank with a regional presence in nine countries > 2nd largest conventional bank in Kuwait in terms of assets (total assets of US$21.3 bn as of Dec 31, 2012) > Offers a wide range of corporate, retail and treasury products through a networ
Slide 31: Burgan Bank: Peer benchmarking
Burgan Bank: Peer benchmarking RoAE v/s Price to Book 16.0% Burgan NBK AUB 12.0% ABK 8.0% KFH Gulf Bank KIB RoAE 4.0% Boubyan Bank 0.0% 0.00 1.00 2.00 3.00 4.00 5.00 CBoK -4.0% Ithmaar Bank -8.0% Price to Book Indicates peers’ average Relatively undervalued with presence in growth markets Note: Q3’1
Slide 32: OSN: Overview
OSN: Overview > Largest digital satellite premium Pay TV operator in MENA region > Market leading technology includes integrated DVR & subscription VOD > Showtime and Orbit merged w.e.f . Aug 1, 2009 to form Panther Media Group Limited (PMGL) > Subscriber base of 734k at December 31, 2012 > Present
Slide 33: United Gulf Bank (UGB): Overview
United Gulf Bank (UGB): Overview > Asset management and investment banking (AMIB) business > Offers asset management, investment banking, brokerage and advisory services > Listed on the Bahrain Stock Exchanges with a market cap of US$465 mn as of February 13, 2013 > Credit rating of Ba2 from Moody’s
Slide 34: Gulf Insurance Company (GIC): Overview
Gulf Insurance Company (GIC): Overview Overview > Multi-line insurance provider with presence across the 7 MENA countries through subsidiaries Provides coverage in the areas of marine, aviation, property, engineering, casualty, life and health insurance, > with a wide range of conventional and takaf
Slide 35: United Real Estate Company (URC): Overview
United Real Estate Company (URC): Overview Overview > Kuwait based real estate developer > Key projects/developments in Kuwait, Jordan, Lebanon, Egypt and Oman > Listed on the Kuwait Stock Exchange with a market cap of US$565 mn as of February 13, 2013 > Major real estate player in Kuwait, ranked se
Slide 36: United Real Estate Company: Key projects
United Real Estate Company: Key projects Kuwait's 2nd largest shopping and entertainment complex, located on the beachfront in the exclusive shopping district of Salmiya A five star hotel with 91 room, including a health club and other leisure club Owned directly by URC (BOT 2025) Marina Plaza
Slide 37: United Real Estate Company: Key projects
United Real Estate Company: Key projects 59 Storey mixed use tower (Office, Retail and Residential) URC owns 42.5% stale in the project Operational in Q1 2013 Al Shaheed tower is an 18 storey office tower, having an occupancy of more than 95% 22 storey office tower, having an Kuwait City o
Slide 38: United Industries Company (UIC): Overview
United Industries Company (UIC): Overview Overview > Established in 1979, UIC invests in the industrial sector in Kuwait and the region > Major investments are Saudia Dairy and Foodstuff Company (SADAFCO) and Al Qurain Petrochemical Industries Company (QPIC) > Listed on the Kuwait Stock Exchange in
Slide 39: United Industries Company: Financial performance
United Industries Company: Financial performance Income from Associates Total Income US$ million US$ million 29 34 26 32 29 18 7 (5) 2009 2010 2011 2012 2009 2010 2011 2012 Net Profit Total Assets US$ million US$ million 633 632 14 599 12 461 4 (26) 2009 2010 2011 2012 2009 2010 2011 2012 39
Slide 40: Saudi Dairy & Foodstuff Company (SADAFCO): Overview
Saudi Dairy & Foodstuff Company (SADAFCO): Overview Overview > Established in 1976 as a pioneering venture in dairy sector, with commencement of production in UHT Milk plant in Jeddah in 1977 > Leading dairy and foodstuff company having operations across the MENA region > Current product portfolio i
Slide 41: Saudi Dairy & Foodstuff Company: Financial performance
Saudi Dairy & Foodstuff Company: Financial performance Total Revenue Net Profit US$ million US$ million % of Net Sales 20% 11% 11% 10% 10% 356 54 302 273 41 212 35 182 18 21 2009/10 2010/11 2011/12 Q2'11/12 Q2'12/13 2009/10* 2010/11 2011/12 Q2'11/12 Q2'12/13 Total Assets Total Shareholder’s Equity U
Slide 42: Qurain Petrochemicals Industries Co. (QPIC): Overview
Qurain Petrochemicals Industries Co. (QPIC): Overview Overview > Established as a holding company focusing on investment opportunities in petrochemicals, oil & gas and energy related sectors From the time of establishment, QPIC’s capital was committed to four petrochemical investments in > Kuwait i.
Slide 43: Qurain Petrochemicals Industries Co: Financial performance
Qurain Petrochemicals Industries Co: Financial performance Total Income Net Profit US$ million US$ million 72 65 31 8 10 0.7 3 25 (7) (3) 2009 2010 2011 Q2'11 Q2'12 2009 2010 2011 Q2'11 Q2'12 Total Assets Total Shareholder’s Equity US$ million US$ million 901 864 840 753 756 744 687 694 642 688 2009
Slide 44: UGB: Streamlining
UGB: Streamlining Total Assets Total Debt US$ million US$ million 1,515 1,241 610 340 2011 2012 2011 2012 Employee Expenses Interest Expenses US$ million US$ million 41 8 33 7 2011 2012 2011 2012 44
Slide 45: KAMCO: Streamlining
KAMCO: Streamlining Total Assets Total Debt US$ million US$ million 531 222 142 274 2011 2012 2011 2012 Employee Expenses Interest Expenses US$ million US$ million 13 15 9 11 2011 2012 2011 2012 45
Slide 46: Annexure: Executive Management
Index Annexure 2 : Executive Management 46
Slide 47: KIPCO: Executive management
KIPCO: Executive management Joined KIPCO Board in 1990 Joined KIPCO in 1990; Board and committee Recipient of Arab Bankers Association of North member of American University of Kuwait, MIT America Achievement Award (2005) BSc from MIT and MBA from Harvard University Faisal Hamad Al Ayyar Sam
Slide 48: Annexure: Key Companies
Index Annexure 3 : Key Companies 48
Slide 49: KIPCO Group companies
KIPCO Group companies Burgan Bank is one of Kuwait’s leading commercial United Gulf Bank (UGB) is KIPCO’s investment banking banks. Burgan has 23 branches in Kuwait and one of operation based in Bahrain. Offering a range of the biggest ATM networks in the country. Burgan is one commercial and invest
Slide 50: KIPCO Group companies (cont'd)
KIPCO Group companies (cont’d) The United Industries Company (UIC) is KIPCO’s The Saudi Dairy and Foodstuff Company (SADAFCO) is industrial holding company. UIC has holdings in a one of the most profitable companies in the United variety of industrial sectors including stakes in Industries Company’s
Slide 51: Annexure: Per Share Return
Index Annexure 4 : Per Share Return 51
Slide 52: KIPCO: Per share return
KIPCO: Per share return EPS Book Value Cents per share Cents per share 14 12 172 169 166 162 9 8 2008 2009 2010 2011 2008 2009 2010 2011 DPS ROE Cents per share Per cent 8.2% 6.6% 8.0% 5.2% 6.8% 4.6% 5.2% 4.4% 14 9 7 7 2008 2009^ 2010^ 2011^ 2008 2009 2010 2011 DPS Dividend Yield * An additional 10%
Slide 53: Annexure: Trends
Index Annexure 5 : Trends 53
Slide 54: KIPCO: Net asset value (NAV)
KIPCO: Net asset value (NAV) NAV/Share Position* US$ As at September 2012 end, KIPCO’s NAV was US$2.4 per share vis-à-vis the market price of US$1.4per share and the book value of US$1.6 per share * Control Premium has been assumed at 50% to the respective market prices to reflect the value of signi
Slide 55: Ownership
Ownership Shareholding Profile: December 2012 Treasury Major shareholders of KIPCO are Retail Investors Shares 3.3% members of ruling family of Kuwait 4.6% HNIs 3.2% They hold their ownership interest in KIPCO through an investment vehicle Al Investment Companies Futtooh Holding Company K.S.C. (
Slide 56: KIPCO Group: Market data
KIPCO Group: Market data Entity P/B P/E Market Cap (US$ mn)1 2012 Current2 2012 Current2 2012 Current2 KIPCO 0.9 1.0 17.3 18.0 1,851 1,922 Burgan Bank 1.7 1.8 14.7 15.0 2,907 2,962 UGB 0.9 0.9 NM NM 504 465 GIC 1.3 1.4 11.1 11.5 345 359 UIC 0.5 0.5 16.9 17.6 173 190 URC 0.7 0.8 6.9 7.7 506 565 Note:
Slide 57: Annexure 6: About the region
Index Annexure 6: About the region 57
Slide 58: MENA Region: Poised for strong economic growth
MENA Region: Poised for strong economic growth Syria 4th Largest Population in the World (2012E) Tunisia Iraq Morocco Population (million) Lebanon #1 #2 #3 #4 #5 #7 #11 #12 #24 Jordan 1,354 Kuwait 1,223 Algeria Bahrain Libya Egypt Qatar UAE 502 Saudi 418 314 Arabia 197 142 128 Oman 63 GCC Yemen Chin
Slide 59: GCC Region: Well positioned to deliver growth
GCC Region: Well positioned to deliver growth Current Account Surplus US$ billion Accumulated current account surplus of over 1.3 trillion US Dollars since 2005 258 330 204 179 162 154 68 2005 2006 2007 2008 2009 2010 2011 GDP / Capita, PPP (2011) (In US$) 48,328 44,682 ….One of the highest per capi
Slide 60: Kuwait: Oil wealth to fuel non oil growth
Kuwait: Oil wealth to fuel non oil growth Real GDP and GDP per capita forecast to GDP Growth (%) grow at a CAGR of 3.7% and 2.6% Real GDP (US$ billion) GDP per capita (US$’000) respectively over the next 5 years 91 76 47 − Oil revenues along with boost in non oil 42 activity to fuel growth 2011 20
Slide 61: Kuwait development plan update
Kuwait development plan update What has happened so far? Development Plan (In US$ Bn) FY2010/11 FY2011/12 KD31 bn (US$108 bn) 4 year plan starting FY 2010/11 The political situation in Kuwait has slowed down the execution of development plan 8.2 6.6 Allocated Allocated Allocation bill for FY 2012/13
Slide 62: Kuwait development plan overview
Kuwait development plan overview Purpose: Overview − Upgrade infrastructure − US$108 bn 4 year plan − Diversify non oil revenue − FY 2010/11 – Approved US$18 bn comprising 884 projects − Create employment − FY 2011/12 – Approved US$18.7 bn comprising 1,240* projects − Develop private sector Th
Slide 63: Annexure 7: Market opportunity
Index Annexure 7: Market opportunity 63
Slide 64: Market Opportunity: BB & OSN
Market Opportunity: BB & OSN Banking Assets/GDP (%)^ Loans / GDP (%)^ 475 140 421 126 326 101 258 77 76 67 64 182 55 53 126 110 108 45 40 90 86 71 27 67 63 10 Note: As on 31st Dec., 2011 Note: As on 31st Dec., 2011 Pay TV Penetration (2010)* Countrywise Pay TV HHs (2010 vs. 2016)* 46% in million 3.5
Slide 65: Market Opportunity: GIC & UGB
Market Opportunity: GIC & UGB Insurance Density *(2011) Insurance Penetration** (2011) (In US$) 3,815 8% 7% 7% 1,886 3% 2% 2% 661 286 425 287 1% 1% 177 99 1% 21 Kuwait Saudi Egypt Bahrain Jordan Lebanon Europe North World Kuwait Saudi Egypt Bahrain Jordan Lebanon Europe North World Arabia America Ar
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